Fundrise Internet Public Offering (iPO), Say What?!

As you may have read from earlier articles, Fundrise is one of the, if not biggest, real-estate crowdfunding platform for investors. Fundrise has been around since 2012, investing over $2.5 billion into real estate. They are the premier, real estate crowdfunding investment platform. Recently, Fundrise has opened it’s doors for current investors on the platform on their next round of their internet public offering or iPO in their case.

Fundrise: brief background

Fundrise has 3 different plans to invest and non-accredited investors can start with a minimum $500. Their fees are approximately 1.00% and your taxation, luckily, can be a 1099-DIV. It can be a 1099-DIV, if you select the appropriate plan (plan I chose has eREITS), which is what us dividend investors want to see!

Fundrise internet public offering (ipo)

I know many readers may be sitting here and asking, what exactly is this internet public offering (iPO) that Fundrise is issuing? First, for Fundrise, the only investors allowed in the iPO are current users of the platform. As you re-call, in my review of Fundrise, I also showed you that I am a current and continuing investor on the platform itself. Now, Fundrise is providing an opportunity to own shares of the company, in and of itself. Lastly, this is not an “Initial Public Offering (IPO)”, that markets are accustomed to (just an FYI).

Here is a wonderful snip-it from their message a few months ago:

In short, you can be an owner in Fundrise, and the goal is to better align the interests of both parties – the users are the owners and we want all-around success for all facets of the platform and company.

our fundrise iPO decision

Fundrise had sent messages to us, as we are current investors on the platform. Due to their timeline, we had only until August 27th to make a decision to invest or not to invest. In addition, they have a calculation that shows how much you can invest. In my case, $1,006 was my allowable investment opportunity.

Therefore, I had a brief analysis to do. Here is what we came up with:

First, $1,006 isn’t a great deal of funds and/or capital. My wife and I both talked through this and we both agreed on that matter. Secondly, we both have enjoyed the Fundrise platform, their ease of use and continual flow of new transactions, properties and deals. Third, the Fundrise platform has been insanely consistent in dividends being earned, received and reinvested. This has reduced much time needed for us to continue to review the performance, reiew of the properties & locations, etc.. We still do, don’t get me wrong, but the pressure has been, for the most part, alleviated. Fourth, the “cleanliness” of the presentation of Fundrise is pleasing. In addition, the constant communication about what is happening has increased our awareness of the portfolio. Fundrise places information in front of us, rather than having to seek out information. We both enjoyed those aspects.

The con here, of course, is that it’s a fairly il-liquid investment and would not provide a stream of income to us. Being an income investor, that is crucial. However, $1,006 is not a material amount and we were able to make a decision.

We made the $1,006 investment into Fundrise and we were able to acquire ~125 shares. This represents below 1% of our total asset picture. Therefore, the Fundrise iPO would not be a detriment to our portfolio, in case the company turns south. Even with this, we are happy to own part of a company that we conduct business transactions with, no doubt!

See the snip-it below and the last major line shows the Fundrise iPO amount:

Fundrise iPO Conclusion

Overall, we made an investment of $1,006. This is not the most capital in the world and we have enjoyed this company. We do not plan on making this a significant part of our portfolio. Since we love their platform, owning part of the company made sense, so long as our exposure stays significantly low.

This is another area of diversification, outside of the ebbs & flows of the stock market, to which has been running smoothly over the last 6 months. We are looking forward to reviewing each quarter-end to see how the investments – both on the Fundrise platform and Fundrise the company – are doing.

You can also create a Fundrise account for free, to go through pages, read more about them and to make a decision to start using their platform. Fundrise, I assume, will continue to issue shares through their Internet Public Offering (iPO), depending on capital needs. Don’t hesitate to reach out for questions and look forward to the comments!

I’m interested but not sure what gain I’ll get investing, say $1,000. That said, I only invested in the “platform” $1000 and in six months I made only $29, meaning I’m getting 2.9% “interest” that’s really re-imnvested, so the actual interest seems low. I’ve written the company but can’t understand how I get these emails that say “we sold a property and it gave a dividend of 9%. Sounds good but it appears that I get 2.9% and either they or others are getting the rest. They’re copy and paste answers to me just indicate how much I’ve invested and how long I’m there determines how much I make (what my dividends are) but there seems to be no formular for me to know what. I feels like since I don’t know, I’ll just get what they gave me. Sorry..off topic but I’m not sure about an iPO when I can’t seem to make more than 2.9% dividends. Thoughts?